BOARD'S REPORT

Dear Shareholders,

Your Directors have great pleasure in presenting the 28th Annual Report on the Operations of the Company together with audited statement of accounts for the year ended March 31, 2016

BUSINESS PERFORMANCE:

The year witnessed good performance with all- round growth from Domestic and overseas sales. Your company registered sales growth of 4.7% to Rs. 620.94 Cr. from Rs. 593.04 Cr. in the previous year. The growth was achieved at a time when the overall textile market declined in the current scenario. Company's existing product portfolio was praiseworthy as they improved their market shares both domestically and globally. Total Export Turnover was Rs.347 Cr. or approx 56% of revenues in 2015-16.

DIVIDEND:

The Board, in its meeting held on February 2, 2016, declared an interim dividend of Rs.1.50 per equity shares. Further, The Board, in its meeting held on May 27, 2016 has recommended a final dividend of Rs.1.20 per equity shares for the financial year ended March 31, 2016. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting to be held on August 20, 2016. Together with the Interim dividend of Rs.1.50/- per share, total dividend for the financial year ended March 31, 2016 works out to be Rs. 2.70/- per equity share of Rs. 10/- each. The total dividend pay out (including dividend distribution tax) for the current year is Rs. 300.40 Lacs. as against Rs. 222.52 Lacs. in the previous year. The Company have paid Dividend Distribution Tax of Rs. 61.15 Lacs for the year March 31,2016.

BONUS SHARE:

The Company has allotted 2225162 fully paid up equity shares of face value Rs. 10 in September 2015 to shareholders of the Company in proportion of 4:1 and consequently, the number of issued and fully paid equity shares increased from 8900650 to 11258112.

TRANSFER TO RESERVES:

The Company proposes to transfer Rs. 422.52 Lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 4550.84 Lacs is proposed to be retained in the Profit and Loss Account.

RESERVE AND SURPLUS:

Reserves and Surplus stood at to Rs. 7741.78 Lacs as at March 31, 2016 compared to Rs. 7286.43 Lacs as at March 31,2015. The increase was due to retained earnings.

BOARD MEETINGS:

The Board of Directors duly met 8 times during the financial year from 1st April, 2015 to 31st March, 2016. The dates on which the meetings were held are as follows:

May 27, 2015, August 04, 2015, August 07, 2015 September 8, 2015 October 30, 2015, November 8, 2015, February 2, 2016 and February 9, 2016.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of executive and independent directors. On March 31, 2016 the Board consists of seven members, three of whom are executive directors or whole Time Director and four are independent directors.

The policy of the Company on directors' appointment and remuneration including criteria for determining qualification, positive attributes independence of director and other matters as required under sub- section (3) of Section 178 of the Companies Act,2013 is available on our website <http://damodargroup.com/pdf/> DIL_policies.pdf. There has been no change in the policy since the last fiscal year. We affirm that remuneration paid to directors is as per the terms laid out in the nomination and remuneration policy of the company.

DECLARATION BY INDEPENDENT DIRECTOR(S):

The Company has received necessary declaration from each independent director under section 149 (7) of the Companies Act, 20113, that he/she meet the criteria of independence laid down in Section 149 (6) of the Companies Act,2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act,2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder Relationship committee. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

FAMILIARIATION PROGRAMME FOR INDEPENDENT DIRECTORS:

All new independent directors inducted into the Board attend an orientation programme. The Details of training and familiarisation programme are provided in the corporate governance Report and also available on our website <http://damodargroup.com/pdf/DIL_policies.pdf>

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING:

The Board of Directors has adopted the Insider Trading Policy in accordance with the requirement of SEBI (Prohibition of Insider Trading) Regulations, 2015 and the Insider Trading Policy of the Company covering code of practices and procedures for fair disclosure of unpulished price sensitive information and code of conduct for prevention of insider trading is available on our website <http://damodargroup.com/investors/code-conduct.php>

LISTING AGREEMENT:

The Securities and Exchange Board of India on September 2,2015 issued SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 and the said Regulation were effect from December 1, 2015. All listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited during December,2015.

POLICIES:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 mandated the formulation of certain policies for all listed Companies. All our corporate governance policies are available on our website www.damodargroup.com  All our corporate policies are reviewed periodically by the Board and undated based on need and new compliance requirement.

In addition to its Code of Conduct and Ethics, key policies that have adopted by the Company are as follows:

• Nomination and Remuneration Policy: The policy formulates the criteria for determining qualification competencies, positive attributes and independence of a director and also criteria for determining the remuneration of the directors' key managerial personnel and other employees.

• Related Party Transaction Policy: The Policy regulated all transaction between the Company and its related party.

• Corporate Social Responsibility Policy: The Policy outlines the Company strategy to bring about a positive impact on society through programme relating to hunger, education healthcare and environment.

• Policy on Material Subsidiaries: The policy used to determine the material subsidiaries and material non listed Indian subsidiaries of the Company.

• Whistleblower Policy : The Company adopted the whistleblower mechanism for director and employee to report concerns about unethical behaviour, actual or suspended fraud , violation of Company rules of other matters or activity on account of which the interest of the company affected.

• Insider Trading Policy: The policy provides the framework in dealing with securities of the Company.

CHANGE IN NATURE OF BUSINESS, IF ANY:

During the year, there was no changes in the nature of business of the Company

DIRECTORS AND KEY MANAGERIAL PERSONNEL CESSATION:

There is no director and Key Managerial personnel had resigned from the services of the Company.

APPOINTMENT:

Mr. Arunkumar Biyani - Retiring Director:

As per the provisions of Companies Act,2013 Mr. Arunkumar Biyani shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board is pleased to recommend their re-appointment.

DIRECOTR'S RESPONSIBILITY STATEMENT:

In terms of Section 134(3) of the Companies Act, 2013, the Directors would like to state:

a) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

COMMITTEE OF THE BOARD:

The Board has five committees, the Audit committee, the Nomination and Remuneration committee, the Stake holders Relationship Committee, the Corporate Social Responsibility Committee and the Risk Management Committee. The detailed note on the composition of the Board and its committees is provided in the corporate Governance report section of this Annual Report.

AUDIT OBSERVATIONS:

Auditors' observations are suitably explained in notes to the Accounts and are self-explanatory.

AUDITORS:

i) Statutory Auditors:

Your Company's Auditors, M/s. Jitendra Mishra & Co., Chartered Accountants, were appointed as the Statutory Auditors at the 27th Annual General Meeting for a term of 5 years. Their appointment is to be ratified by the shareholders under Section 139 of the Companies Act, 2013 at the ensuing Annual General Meeting.

The Statutory Auditor's Report does not contain any qualification, reservation or adverse remark.

ii) Cost Auditor:

Your Company's Cost Accountant, M/s. Dilip M. Bathija, was appointed by the Board of Directors at its meeting held on May 27, 2015 to audit the Cost Accounting records, as may be applicable to the Company for the financial year 2015-16 and their remuneration has been approved at the previous Annual General Meeting.

iii) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s. Pramod Jain & Co., Company Secretaries, as its Secretarial Auditor to undertake the Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report certified by our Secretarial Auditors, in the specified form MR-3 is annexed herewith and forms part of this report. (Annexure-A)

iv) Internal Auditor:

As per requirements of Section 138(1) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company appointed M/s Shailendra Jain & Associates

Chartered Accountants as Internal Auditor of the Company to conduct Internal Audit of business processes, financial reporting controls, compliance with applicable laws, regulations etc.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 7, 2015 (date of last Annual General Meeting) on the Company's website (www.damodargroup.com), as also on the Ministry of Corporate Affairs' website.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management's Discussion and Analysis for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

VIGIL MECHANISM (Whistle Blower Policy):

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at <http://damodargroup.com/pdf/DIL_Vigil_Mechanism_Policy.pdf>

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

Your Company is committed to provide a work environment which ensures that every woman employee is treated with dignity, respect and equality. There is zero- tolerance towards sexual harassment and any act of sexual harassment invites serious disciplinary action.

The Company has established a policy as per under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 against Sexual Harassment for its employees. The policy allows any employee to freely report any such act and prompt action will be taken thereon. The Policy lays down severe punishment for any such act. Further, your Directors state that during the year under review, there were no cases of sexual harassment reported to the Company.

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT:

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report other than those disclosed in the financial statements.

CORPORATE GOVERNANCE:

The Company has adopted the best possible Corporate Governance norms and it has been our endeavour to comply and upgrade to the changing norms.

A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In terms Schedule (V)(D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015, a certificate of the Managing Director inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting to matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,2014, is given in the Annexure-B to this report.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-C.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Corporate Social Responsibility is the Companies intent to make a positive difference to the society. As per Companies Act, 2013 which requires Companies contribute some part of its profits towards the CSR activities. we have adopted Corporate Social Responsibility as a strategic tool for sustainable growth. With the CSR Vision, Build a powerful partnership Society for Sustainable Development and to improve the quality of life of the communities we serve through long term stakeholders' value creation. We are committed to operate our business with emphasis on CSR in all areas of our operation. The Corporate Social Responsibility Policy enumerating the CSSR activities to be undertaken by the Company, in accordance with Schedule VII to the Companies Act,2013 was recommended to the Board and the Board adopted the same.

The said policy was also available on the website <http://damodargroup.com/pdf/DIL_CSR_Policy.pdf>. The Annual Report under CSR activities is annexed to the report as Annexure D.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The prescribed particulars of Employee required under section 197 read with Rule 5 of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure-E as form the part of Board's report.

RELATED PARTY TRANSACTIONS:

Related party transactions that were entered during the financial year were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-F.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Regulations. This Policy was considered and approved by the Board has been uploaded on the website of the Company at <http://damodargroup.com/> pdf/DIL_RPT _Policy.pdf

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided elsewhere in this Annual Report in Management Discussion and Analysis.

INTERNAL CONTROL SYSTEM AND AUDIT:

In terms of Section 134 of the Companies Act 2013 and provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditors report to the Chairman of the Audit Committee of the Board.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee on a regular basis.

M/s. Shailendra Jain & Associates, Chartered Accountants, acts as the Internal Auditor of the Company under Section 138 of the Companies Act, 2013.

ACKNOWLEDGMENT:

Your Directors would like to acknowledge and place on record their sincere appreciation of all stakeholders - shareholders, bankers, dealers, vendors and other business partners for the excellent support received from them during the year under review. Your Directors recognise and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of the Board

Sd/- Arunkumar Biyani

Chairman

Place: Mumbai

Date: May 27, 2016